Papua New Guinea’s Prime Minister Peter O’Neill announced in December that 2018 would bring changes to the country’s seafood industry, starting with the cancellation of a fishing subsidy and its replacement with a rebate for local seafood processors.

Papua New Guinea had previously discounted the price of fishing days bought through the country’s vessel day scheme on the premise that the companies receiving the subsidies would process the catch in PNG, the Papua New Guinea Post-Courier reported. But the vessels most often took their fish out of the country for processing. In 2017, close to 80 percent of fish caught by PNG-based fleets was processed in other countries. Many PNG-flagged tuna vessels didn’t even visit Papua New Guinea in 2017, the newspaper reported.

The new program, effective as of 1 January, requires all companies to pay full price for their permits, but those that land and process their catch in PNG will now receive a payment of PGK 1,300 (USD 400, EUR 333) per metric ton of fish.

O’Neill said the changes will save his country PGK 235 million (USD 72.7 million, EUR 60.7 million) in 2018, and end a policy that effectively subsidized tuna processing and jobs in other countries.

“When companies process their catch in Papua New Guinea, it not only creates jobs, particularly for female workers, but broadens the national economic base with increased downstream processing, and increases Government revenue,” O’Neill said. “We are still facing a challenging global economy, and these are important changes that will help our country.”

The shift in policy has been met with resistance both from local seafood companies and other countries in the region. Sylvester Pokajam, the former managing director of PNG’s National Fisheries Authority, issued a press release stating that the six Papua New Guinea-based processing firms said the firms are nearing a final determination of whether they will close their facilities if they cannot continue to get subsidized fishing for their associated fleets to take fish offshore.

O’Neill’s government said in response that the current total catch of fish in PNG waters exceeds all current processing capacity in the country, but that due to the catch being sent to other countries, plants are underused and that with the new policy, local factories could quintuple their current annual production, estimated at 65,000 metric tons.

Last month, the president of the Philippines, Rodrigo Duterte, also appealed to O’Neill to abandon his reforms, saying the changes will affect tuna processing industry in the Philippines. Duterte offered to help Papua New Guinea expand its rice and coconut industries in exchange for keeping the previous policy in place. In response, O’Neill told Duterte he would work to strengthen cooperation between the two countries but would not backtrack the rebate plan.